What stipulates the Prohibit Predatory Lending Act?

Answer:

The Prohibit
Predatory Lending Act is a House bill aimed at restricting predatory lending
practices. Another federal bill with the same purpose is the Responsible Lending
Act. Federal regulation has turned out weaker than state legislation attempts
to curb harmful lending practices. Most of the states have already passed
severely restrictive laws, differing on a large scale in the details, but in
general providing consumers with the legal opportunity to sue predatory
lenders. Just to mention, California
state predatory lending laws seem to be most tolerant towards subprime lenders,
which additionally supports an expensive real estate market.

However,
rigid state laws are superseded by meeker Federal bills, which seems normal
given the wealth of lenders and their financial incentive to shower House reps
with gifts of different value.

What the Prohibit Predatory Lending Act does at all?

The Prohibit
Predatory Lending Act is aimed to restrict property flipping/refinancing.
Subprime lenders are prevented from recommending loan refinance to borrowers
without explicitly stating costs, advantages and disadvantages of the
transaction upfront. The Prohibit Predatory Lending Act also includes
obligatory mortgage counseling for any high cost loan. High cost loan will be a
mortgage with 8% interest rate, or higher.

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